Transcript Chapter 4: Developing the Right Market Mix

Entrepreneurship
Chapter 5
Developing the Right Marketing Mix
Marketing Mix = the 4 Ps
1.
2.
3.
4.
Product
Price
Place
Promotion
Goal: Bring the right product to the
right place at the right price with the
right promotion.
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Products (and Services)
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Products & services are defined by:
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Physical attributes
Performance characteristics
Pricing
Branding
Delivery
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Focus the Brand
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The primary product benefit is “owned”
by the company.
Ford’s Edsel – lacked focus, too many
features  failure
Ford’s Mustang – tightly focused on
target market of 20-30 year olds 
success
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Ways to Build a Great Brand
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Provide high-quality products/services
Maintain high ethical standards
Define the product/service clearly
Treat employees well
Make ads positive & informative
Associate the company with a charity
Be involved in the community
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What Does the Price Tell Consumers
About Your Product/Service?
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Strategies:
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Keystoning: doubling the costs
 Cost plus: cost plus profit margin
 Penetration: low price early in PLC
to gain market share
 Skimming: high price early in PLC
before competitors enter market
 Meet or beat the competition
Mark-ups
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Place
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Type of business affects the location
that works.
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Who are your customers?
Where do they shop?
Goal: Find a location affordable for you
yet also convenient for customers.
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Promotion
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Using advertising + publicity to get
your market message to your
customers
Advertising (purchased): billboards,
TV ads, magazine ads
Publicity (free): mentions in media
such as articles, stories on TV, etc.
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Promotional Ideas
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Advertising specialties
Banner ads
Billboards
Blogs
Broadcast media
Brochures
Business cards
Catalogs
Coupons
Direct mail
Directories
Flyers
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Networking
Newsletters
Print media
Promotional clothing
Public speaking
Samples/demos
Special events
Sponsorships
Telemarketing
Toll-free numbers
Websites
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Marketing Materials
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Examples include brochures, posters,
order forms, business cards, & invoices.
Should reinforce competitive advantage
Serve 3 functions
1. Help you organize your thinking
2. Enable you to teach others in company
about the business
3. Enable you to sell product/service
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Media
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Print
Television
Radio
Web
Provide reach & frequency
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Advertising
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Paid print advertising includes newspapers,
magazines, newsletters, & Yellow Pages &
other directories.
Print advertising components
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Headline (title)
Deck (subhead)
Copy (text)
Graphics (photos or drawings)
Logo
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Publicity
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Use media to generate publicity
Mail/fax pitch letter and press release
Pitch letter “pitches” the story of your
business
Press release provides facts to answer:
who, what, when,where, why, how?
Follow up with phone call
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Philanthropy
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Giving money, time, advice, skills to help
minimize or eliminate social, environmental, or
political problems
Foundations are nonprofits that raise funds for
charities that assist people, animals, the
environment, and other causes.
Many philanthropic foundations were started by
entrepreneurs.
Philanthropy creates goodwill: reputation, name
recognition, positive customer relations.
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Cause-Related Marketing
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Inspired by commitment to a social,
environmental, or political cause
Simple way to work philanthropy into
your business
Examples:
1. Donate fixed % of revenue to charity
2. Donate product/service
3. Encourage employees to volunteer
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Marketing as a Fixed Cost
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Marketing costs are money that is needed to
drive sales.
Should not be budgeted as a percent of sales
Calculate Breakeven Units to determine
whether the business is selling enough to
cover the marketing costs
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Breakeven units = Fixed Costs (per month or
per year)/Gross profit per unit
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